Behind every successful dentist is a kick-ass accountant.
How do you know if you recruit the right person for the job? Asking dental friends for a referral is by far the best method. If your close circle can’t give you a hot tip, look to your local dental society! Find a few of the more seasoned leaders who seem to have their a good business sense and ask who they use. That’s what dental societies are for… dentists helping each other out.
You may have heard the expression, “It’s not what you make, it’s what you keep.” Earning a nice income is great, but it’s just as important to figure out how to not give so much away in taxes. Now I’m not telling you to commit tax fraud… let’s be clear on that! But if you pay the government more than you need to, they don’t write you a refund check. They keep it. Yes, people can get tax refunds, but I’m talking about paying the government too much because you didn’t properly deduct your appropriate business expenses. There’s no refund for that.
There’s a lot of tax code to sort through and it varies from state to state and country to country. The tax code is like a wild jungle. You need a dashing swashbuckler to guide you through that dangerous jungle. I’m pretty sure this is the first time the term “dashing swashbuckler” has been used as a metaphor for an accountant.
But your accountant is your hero. If you ever get audited, they will defend you from the IRS. They can also potentially save you a ton of money every year by making sure you take full advantage of the tax code. Proper classification of your income, deductions, and other expenses is a perfectly legal way to reduce the pinch of taxes.
Your superhero accountant can also give advice on what legal entity you should operate under. PC, LLC, S –Corp… the terms get confusing quickly. There isn’t a single solution that works best for every dentist. And you can get paid as a certain legal entity for years without realizing that a simple re-classification can have a significant effect on how much hard-earned money you keep.